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Will China rain on auto show parade?

Monday, September 14, 2015 - 01:44

Flush with cash and confidence after years of rising sales, German carmakers are used to reaping industry-leading returns. But with Chinese demand abruptly slowing, the profit engine has begun to sputter, overshadowing the glitz of the Frankfurt auto show which opens on Tuesday. Ciara Lee reports from the show.

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Frankfurt motor show - crammed with cash and confidence. Set in Europe's manufacturing heartland, the kings of luxury are out in force. Bentley and Rolls Royce will have their most powerful and upmarket designs on offer. But there's a cloud hanging over the event this year, despite 210 product premieres. China's crackdown on government corruption and now an economic slowdown are hurting high-end brands Jan Randolph is from IHS Global Insight. (SOUNDBITE) (English) IHS GLOBAL INSIGHT, DIRECTOR OF SOVEREIGN RISK, JAN RANDOLPH, SAYING: "Taken overall in terms of global sales, China is significant but slack can be taken up elsewhere in the world, particularly the rest of Europe and the U.S." The SUV market is hoping it can pick up some of that slack. Latest to join the club is Jaguar Land Rover - unveiling the F-PACE luxury SUV-crossover. JLR is relatively late to the SUV party, but CMC's Jasper Lawler, says now's the time for Europe to cash in. (SOUNDBITE) (English) MARKET ANALYST, CMS, JASPER LAWLER, SAYING: "It is dominated by the large U.S. companies, GM, Ford and to a lesser extent Toyota. They produce most of the SUVs seen in the U.S. Europe, there isn't quite that trend of the SUVs, yet but I think it's something that is going to improve in the future, particularly if oil prices stay low and that will be a positive for European carmakers, particularly VW." Europe's auto market has seen a significant recovery in recent months. And Germany's home teams - Audi, BMW and Mercedes-Benz - are celebrating with new luxury models. But a number of brands have relied on China for 30-50 percent of their profits. With demand falling in Brazil, Russia and Latin America, it may be time to move onto the next party - wherever that may be.

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Will China rain on auto show parade?

Monday, September 14, 2015 - 01:44